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Sinha backs call for higher NPA provisioning

Reserve Bank of India (RBI) Deputy Governor Anand Sinha has backed the Mahapatra committee’s recommendation of higher provisioning for restructured assets. Banks, however, had opposed the proposal, saying this would lead to a sharp rise in bad assets.

Earlier, the central bank had set up a working group under the chairmanship of RBI Executive Director B Mahapatra to review the guidelines on restructured advances of banks and financial institutions. In its report released in July, the committee had suggested the regulatory forbearance while recasting debt be done away with after two years.

In the interim, for fresh loan recasts, it had sought an increase in standard asset provisioning to five per cent, against the current two per cent. Currently, banks can classify a restructured standard asset as standard debt by increasing the provisioning requirement. Apart from standard asset provisioning of two per cent, banks also have to ensure provisioning for diminution in the net present value of the asset, following the debt recast.


 

NPA of public sector banks touches Rs 73,038 crore in June

The Gross Non-Performing Assets (GNPAs) of Nationalized Banks as on June 2012 were Rs.73,038 crore which amount to 2.94% of Gross Advances. Data Reporting System of Reser...

KFA gets a last chance: Banks look for fresh revival plan

KFA gets a last chance: Banks look for fresh revival plan
The meeting of Kingfisher Airlines' lenders here today remained inconclusive as banks have sought more details from the management on the revival plan by September, when ...

In Andhra Pradesh, moneylenders rush to fill vacuum created by MFIs

Poor borrowers avoid banks because of delay in access to loans: Survey

The Andhra Pradesh crackdown on microfinance companies has driven an increasing number of poor borro...

SIMA urges centre to implement Rs 35,000 crore debt recast

AHMEDABAD: The Southern India Mills' Association ( SIMA) chief S Dinakaran has asked the Centre to expedite implementation of the debt restructuring package to help make ...

Axis Bank acts tough on SevenHills debt recast

Seven Hills Healthcare Pvt. Ltd which operates Asia’s largest private hospital in Mumbai had asked key lenders to recast its debts that total Rs. 763 crore. The proposal ...

Lunch with BS: Chandra Shekhar Ghosh

The founder of India’s top microlender on keeping a low-profile and focusing on the east, a region where others were reluctant to expand

Not so long ago, a senior West Ben...

RBI seen keeping rates steady in Sept: Reuters Poll

Reserve Bank of India is expected to keep its key interest rate steady this month, a Reuters poll showed, and economists see only a slight easing this calendar year, poin...

SBI Gujarat circle records lowest NPAs

Gross NPAs for Ahmedabad circle stand at around 1.2%

While being on the forefront of the industrial development, Gujarat-based borrowers have set a unique example of maint...
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